A survey of leading industry figures by GlobalData’s Retail Banker found that digital banks are playing a big role in the predictions for next year.

“As retail bank branches continue to close, Amazon, Apple, Uber Money and others have realized that by being hyper-relevant at multiple moments in their customers’ lives, they can strengthen their brand value and become an embedded and trusted partner, ” said Omnio CEO Adrian Cannon.

“These [digital challengers] are poised to further expand their product offering in the financial services sector, challenging the big banks to up their game quickly.”

Heavy investment in the fintech sector has put digital banks in a better position to disrupt the traditional banking market. There are now six challenger banks worth more than $1 billion, including Brazil's Nubank ($10.4 billion), America's Chime ($5.8 billion) and Germany's N26 ($3.5 billion).

"2020 this could be the year that a traditional bank takes the leap and acquires a challenger bank to take advantage of the brand loyalty as well as the scalable cloud systems these banks have," said Ian Bradbury, CTO of Financial Services at Fujitsu.

However, digital banks now face challenges beyond raising capital and offering new applications.

“They need to expand their product lines into more profitable sectors of the market. At the same time, they need to increase the number of customers signing up to use their premium subscription products,” said GlobalData Banking Editor Douglas Blakey.

“Despite the hype, UK challengers such as Monzo, Starling, Tandem, Revolut and N26 are still not eating the incumbent banks' lunch when it comes to primary banking relationships. Nor are the majority of contenders even remotely close to profitability, but the only profitability.”